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MANAGEMENT SPECIALISTS, KLAMATH TRIBE OF INDIANS
KLAMATH FALLS, OREG.
KLAMATH FALLS, OREG., August 26, 1957.
Klamath Falls, Oreg. GENTLEMEN : In accordance with your request we have audited the books and records of the Management Specialists, Klamath Tribe of Indians, for the period May 9, 1955, to June 30, 1957, and herewith submit our report :
KLAMATH INDIAN RESERVATION
The Klamath Indian Reservation is located in southern Oregon, all in Klamath County except for about 40,000 acres in Lake County. It is on the eastern slope of the Cascade Range. It has about 866,000 acres of tribal lands consisting of forest, grazing, and farming land, and there are about 2,100 tribal members.
LAW PASSED BY THE UNITED STATES CONGRESS PROVIDING FOR TERMINATION OF
FEDERAL CONTROL OVER THE KLAMATH INDIANS
The act of the United States Congress authorizing the appointment of the Management Specialists was approved August 13, 1954, and is designated (68 Stat. 718; 25 U. S. C. 564 et seq.; also known as Public Law 587 of the 83d Cong.). It provides for the termination of Federal supervision over the trust and restricted property of the Klamath Tribe of Indians consisting of the Klamath and Modoc Tribes and the Yahooskin Band of Snake Indians, and of the individual members thereof, for the disposition of federally owned property acquired or withdrawn for the administration of the affairs of said Indians, and for a termination of Federal services furnished such Indians because of their status as Indians.
The original act was amended by act (71 Stat. 347; also known as Public Law 85–132 of the 85th Cong.) which was approved August 14, 1957.
Briefly the Management Specialists are authorized by the act to do the following:
1. Cause an appraisal to be made, within not more than 12 months after their employment, or as soon thereafter as practicable, of all tribal property showing its fair market value.
2. Give each adult member of the tribe, immediately after the appraisal of the tribal property, an opportunity to elect for himself, and, in the case of a head of a family, for the members of the family who are minors, to withdraw from the tribe and have his interest in tribal property converted into money and paid to him, or to remain in the tribe and participate in the tribal management plan to be prepared pursuant to item (5) below. The new amendment to the act provides that in the case of members who are minors, or incompetent, etc., the opportunity to make such election on their behalf shall be given to the person designated by the Secretary as the person best able to represent the interests of such member.
3. Determine and select the portion of the tribal property which, if sold at the appraised value, would provide sufficient funds to pay the members who elect to have their interests converted into money, arrange for the sale of such property, and distribute the proceeds of sale among the members entitled thereto. That whenever funds have accumulated in the amount of $200,000 or more, such funds shall be distributed pro rata to the members who elected to take distribution. The new amendment to the act provides that no sales of tribal property shall be made prior to the adjournment of the 2d session of the 85th Congress.
4. Cause such studies and reports to be made as may be deemed necessary or desirable by the Secretary of the Interior in connection with the termination of Federal supervision as provided in the act.
5. Cause a plan to be prepared in form and content satisfactory to the members who elect to remain in the tribe, and to the Secretary of the Interior for the management of tribal property through a trustee, corporation, or other legal entity.
Among other things, the act further provides as follows":
1. Such amounts of Klamath tribal funds as may be required for the purposes of this section shall be available for expenditure by the Secretary of the Interior. That the expenses incident to the sale of property and the distribution of proceeds of sale pursuant to item (3) above shall be charged exclusively to the interests of the members who withdraw from the tribe, and the expenses incurred under items (4) and (5) above shall be charged exclusively to the interests of the members who remain in the tribe, and all other expenses incurred under section 5 of the act shall be charged to the interests of both groups of members. The new amendment to the act provides that in order to reimburse the tribe, in part, for expenditures of such tribal funds as the Secretary deems necessary for the purposes of carrying out the requirements of this section, there is authorized to be appropriated out of the United States Treasury, an amount equal to onehalf of such expenditures from tribal funds, or the sum of $550,000, which ever is the lesser amount.
2. It is the intention of the Congress that all of the actions required by sections 5 and 6 of the act be completed at the earliest practicable time and in no event later than 4 years. The new amendment to the act extends the time an additional 2 years or to August 13, 1960.
CONTRACT WITH MANAGEMENT SPECIALISTS
The contract between the Secretary of the Interior and the Management Specialists was approved May 9, 1955. An amendment to this contract was approved June 19, 1957. In view of the new amendment to the act, this contract will again have to be amended.
The Management Specialists who made the original contract were as follows: T. B. Watters, Klamath Falls, Oreg. ; W. L. Phillips, Salem, Oreg.; Eugene G. Favell, Lakeview, Oreg.
The amendment to the contract accepted the resignation of W. L. Phillips effective as of March 31, 1956, and provided that Mr. Watters and Mr. Favell shall be designated as the managers.
In addition to the requirements of the act shown above, the additional contract requirements are summarized as follows:
1. Each manager shall be compensated for his services at the rate of $1,000 per month.
2. The managers shall submit to the Secretary of the Interior a detailed budget containing an estimate of the expenses they expect to incur and an estimate of the compensation they expect to earn during the first 12 months this contract is in effect. Prior to the end of said 12-month period a similar budget shall be submitted for the second 12 months this contract is in effect, and another budget for the remaining period. In addition, the managers shall submit a supplemental report at the end of each quarter of each said budget period, which shall contain (1) any necessary revisions in the estimates contained in the budget for the remaining quarters of the budget period, and (2) a statement of expenses actually incurred and compensation actually earned during said quarter.
3. Each manager shall be paid necessary travel expenses and per diem in lieu of subsistance not to exceed the maximum per diem allowance authorized by the Government travel regulations, and where travel is by automobile, payments for transportation expenses shall not exceed the maximum mileage rate authorized by the Government travel regulations.
4. Advances will be made from funds of the tribe and not from funds of the United States. (The new amendment to the act provides that the tribe shall be reimbursed from the United States Treasury an amount equal to one-half of the expenditures or $550,000, whichever is the lesser.)
5. Fidelity bonds shall be required of each manager.
6. Prior to the termination of this contract the managers shall submit a final accounting, in such form as the Secretary of the Interior may prescribe.
7. Qualified employees may be hired to perform such services as may be needed.
8. The contract is to be completed by March 31, 1958. This will have to be extended in view of the extension of the act just passed.
9. In performing their functions under this contract, the managers shall, to the maximum extent feasible, consult with the tribe, consider such suggestions the tribe may make, and keep the tribe informed of their plans and progress hereunder.
COOPERATION OF MANAGERS AND EMPLOYEES
During the course of our audit, we received excellent cooperation from the managers and employees and found the books and records neatly and efficiently kept. Respectfully submitted.
OLIVER E. MOEN, Certified Public Accountant.
MANAGEMENT SPECIALISTS, KLAMATH TRIBE OF INDIANS, KLAMATH FALLS, OREG. Assets :
Balance sheet, June 30, 1957 Cash in bank..
$65, 991. 32 Petty cash--
50. 00 Total cash..
66, 041.32 Equipment, see schedule--
2, 152. 31 Total assets
68, 193. 63 Liabilities: Western Timber Services on appraisal report--
50,000.00 Assets over liabilities --
18, 193. 63 Total liabilities and assets over liabilities.
68, 193. 63 NOTES.—1. No depreciation has been taken on the books on the equipment item shown above.
2. The checkbook was held open for a few days in July 1957, in order to pay all current bills so they would be reflected in the statements for the period ended June 30, 1957.
3. We were informed by the managers and the Western Timber Services that the amount due to Western Timber Services at June 30, 1957, was about $50,000. See balance sheet comments for further information on this liability. Revenues and expenditures, for the period from May 9, 1955, to June 30, 1957
NOTE.-The income and expenses for the period May 9, 1955, to June 30, 1955, are included in the revenues and expenditures for the period May 9, 1955, to June 30, 1956. The 1st deposit was made July 5, 1955, and the 1st checks were drawn in July 1955.
NOTE.- A report is submitted by the managers entitled "Quarterly Report of Obligations and Expenditures" which gives the financial status of each quarter and gives an estimate of the funds needed for the next quarter.
Equipment, June 30, 1957
Oct. 20, 1956
29. 40 84. 75 348.00
Total purchased for fiscal year ended June 30, 1957.
25. 20 148.00 30. 70
2, 152. 31
Equipment loaned to this office is listed as follows:
Metal folding chairs.
From whom borrowed
do. do. do. do. do. do. do.
do. Klamath agency.
KLAMATH FALLS, OREG., August 26, 1957. I have examined the balance sheet of the Management Specialists, Klamath Tribe of Indians, as of June 30, 1957, and the related statement of revenues and expenditures for the period May 9, 1955, to June 30, 1957. My examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as were considered necessary in the circumstances.
My duty was to check the financial duties and results of the Management Specialists, and, in my opinion, in this respect they have conformed to act designated (68 Stat. 718, 25 U. S. C. 564, et seq.) and their contract pertaining thereto. In my opinion, the accompanying balance sheet as of June 30, 1957, and the related statement of revenues and expenditures present fairly their financial position and the results of their operations for the period then ended, in conformity with generally accepted accounting principles.
OLIVER E. MOEN, Certified Public Accountant.
COMMENTS ON VARIOUS ITEMS IN THE BALANCE SHEET AND IN THE STATEMENT
OF REVENUES AND EXPENDITURES
CASH IN BANK
All canceled checks returned by the bank for the period were examined and checked into the check register. The bank balance shown by the books was reconciled with the balance shown on the bank statement as of June 30, 1957. The balance shown on the bank statement was confirmed by direct correspondence with the bank.
The petty cash fund of $50 was verified on August 23, 1957, which is analyzed as follows: Cash on hand..
$27. 96 Check, Chiloquin Timber Co.
2. 50 Receipts for various small items.
33. 48 Postage paid (there is an itemized list of small amounts but no receipts)- 25. 73 Telegram, no receipt_
92. 59 42. 59
Balance of petty cash..
50.00 We were informed that an up-to-date map of the Klamath Indian Reservation was prepared and a quantity were printed which were sold at $1.25 each, which was put into the petty-cash fund, as shown above. This will be credited to printing when the next petty-cash check is issued.
ALLOTMENTS FROM KLAMATH INDIAN AGENCY
The amounts received from the Klamath Indian Agency were confirmed by direct correspondence. The allotments received are based on the budgets submitted (see schedule) for each year. In addition, the managers submit reports entitled "Quarterly Report of Obligations and Expenditures," which give an: estimate of the funds needed for the next quarter.
EXHIBITS NOT RETURNED
In connection with the appraisal bids, detailed exhibits were prepared containing maps and instructions to assist the bidders in preparing their bids. A charge of $50 was made for each exhibit, which was to be refunded upon return of the exhibit. Three of the depositors chose to retain their exhibits; therefore, $150 was deposited into the bank account.
We checked the salaries paid to the managers and employees and the payroll reports filed, and found all to be in order. The various payroll tax agencies have issued letters stating that the managers are contractors and therefore not subject to payroll tax withholdings.